"Reconsider Designation of Regulated Areas"… Gimpo City Submits Proposal to Ministry of Land, Infrastructure and Transport

Hangang Metro Xi 2nd Phase, Geolpo-dong, Gimpo-si, Gyeonggi Province. The premium on pre-sale rights is reported to have increased as Gimpo-si was excluded from the June 17 measures. (Photo by Im On-yu)

[Asia Economy Reporter Lee Chun-hee] Gimpo City in Gyeonggi Province, known to be experiencing a balloon effect due to the June 17 real estate measures, has requested reconsideration from the Ministry of Land, Infrastructure and Transport.

On the 4th, Gimpo City announced that it had submitted a petition to the Ministry asking for reconsideration of the proposal to additionally designate regulated areas. In the petition, Gimpo City stated, "Most apartment prices in the Gimpo area, including Gimpo Hangang New Town, have not even recovered to the prices from 10 years ago," and argued, "It is inappropriate to additionally designate Gimpo as a regulated area just because prices of some apartments have risen."

The city continued, "More than 70% of Gimpo's total area is a military facility protection zone, and it is adjacent to Gimpo Airport, suffering property disadvantages such as height restrictions," adding, "We cannot force citizens, who have only faced regulations so far under the pretext of stabilizing housing prices, to sacrifice again."

The government, through the 'Management Plan for Housing Market Stabilization' announced on the 17th of last month, designated most areas in the metropolitan area, including Incheon and Gyeonggi Province where the balloon effect was concentrated, as regulated areas such as adjusted target areas or speculative overheating districts.

However, after that, investment demand poured into Gimpo City and Paju City, which were excluded from the regulated areas, causing housing prices in the two places to surge rapidly. In particular, in Gimpo, the rate of increase, which was about 0.02% compared to the previous week as of the 15th of last month before the announcement of the measures, soared to 1.88% as of the 22nd, the week after the announcement.

In response, Minister of Land, Infrastructure and Transport Kim Hyun-mi appeared on a broadcast and said, "We are continuously monitoring Gimpo and Paju, as well as other areas," and added, "If abnormal signs appear in the market, we will take action." Vice Minister Park Seon-ho also made similar remarks.

Mayor Jung Ha-young of Gimpo City appealed to the Ministry of Land, Infrastructure and Transport, saying, "It is unreasonable to designate additional regulated areas before the market direction is confirmed after the government's real estate measures announcement," and urged, "We should observe the market direction for about three more months before deciding on designation."